Arable Farmers are not sharing the Rural Boom

16 February 2001

PR 22/2001

Arable Farmers are not sharing the Rural Boom

"Farmers whose principal income is derived from arable crops are not receiving the higher incomes reported for other farm sectors." Federated Farmers of New Zealand Grains Council Chairman Neil Barton said to-day.

Recent media comment has the rural sector booming. Some export sectors have benefited from world commodity price rises, coupled to the recent low value of the New Zealand dollar. Both meat and dairy producers are receiving increased prices after a long period of low returns.

"Not so the arable farmer," said Mr Barton. "Many arable crops are contracted well ahead. This allows growers to forward plan the management of crops, while allowing processors to secure product at a known price. Most crops are contracted about nine months ahead although some feed wheat contracts are for three years at a fixed price."

Arable farmers are locked in to contracts signed in April or May last year. These contracts stated both a price and a time of delivery for grain and herbage seeds. The prices ruling nine months ago are now well below world prices, when converted to New Zealand dollars.

Arable farmers have at the same time, had to pay the cost increases in both fertiliser and fuel prices, as well pay for other farm inputs that have increased in price because of the low New Zealand dollar. Fertiliser and fuel are 'big-ticket' items on an arable farm and must be paid for before any returns are received.

"It is not correct to say, "things are booming down on the farm". Arable farmers fear they will not receive any benefit from the low New Zealand dollar and will only be left with the increased costs," said Mr Barton.

ENDS

For further information:- Neil Barton Home:- (03) 688-8238 Mobile- (021) 441-125 Kevin Geddes Work:- (03) 307-8148 Home:- (03) 696-3870 Mobile:- (025) 203-3437

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